Econet’s Liquid Telecom now worth half a billion?

On January 12 Last week Altech announced the offloading of an 8.6% stake in Liquid Telecom Holdings to Econet Wireless for a reported $55 million. While this move has further secured Econet Wireless Group’s control of what is now Africa’s largest terrestrial fibre network operator. It has also shed more light on the value of the Zimbabwean-made Econet Wireless empire. By simple arithmetic, this deal places Liquid Telecom’s value at an estimated $640 million.

While the price that EWG paid for the 8.6% stake may have been subject to distortion due to unknown factors at the time the deal was made, the real valuation can’t be too far north or south of the $640million estimate. This is likely the most accurate valuation that we will have in a while.

Liquid Telecom, the largest fiber network operator in Africa, has a footprint that spans across a large portion of the continent – from Cape Town to Uganda, past 9 other African territories including Zimbabwe. This translates to more than 13,000 km worth of fiber network. The company also operates TPS, a conglomerate in its own right, that offers integrated solutions for electronic payment processing systems within seven African countries.

A lot of Liquid Telecoms value was acquired in 2013 (with a few in 2012). 2013 was particularly a very busy year for the company as it went on a buying spree that resulted in its present valuation. The deliberate expansion started with the acquisition in 2012 of one of the largest ISP in Zimbabwe, ZOL. The kicked off 2013 by buying-out Altech’s east African assets. Soon enough, Liquid was at it again, acquiring Rwanda’s fixed telecommunications network operator, Rwandatel.

With such a valuation, Liquid Telecom will likely emerge as the half-a-billion-dollar jewel on the Econet Wireless crown, alongside Econet Wireless Zimbabwe, another of the group’s clear runaway successes.